Journal of multinational financial management, 144, 387405. The dynamics of capital structure in transition economies. This paper aims to analyze the determinants of the capital structure of the companies in the western balkans wbs using a panel of 30 nonfinancial firms listed in zagreb stock exchange, belgrade stock exchange, and macedonian stock exchange over the period of 2012. They suggest that some of the insights from modern finance theory of capital structure are portable to china in that certain firmspecific factors that are relevant for explaining capital structure in developed economies are also relevant in china. Evidence from transition economies, journal of comparative economics 411, 294308. Determinants of capital structure of chineselisted. We document that serbian firms tend to have much lower debt ratio and that they rely more heavily. Request pdf the determinants of capital structure in transitional economies this study investigates whether capital structure determinants in emerging. A major shortcoming of capital structure studies on developing economies is that they generally restrict their analyses to large publiclytraded manufacturing firms. Capital structure, western balkans, transitional economies, leverage.
Among others, dow jones addressed this demand and has developed their proprietary screening methodologies to identify shariah compliant firms sc. Sasho arsov, aleksandar naumoski determinants of capital structure. The empirical evidence suggested that some traditional capital structure theories are portable to companies in cee countries. The theory of trade off was developed by kraus and litzenberger 1973 arguing that the companies choose their optimal. Determinants of capital structure of chineselisted companies, journal of business research, elsevier, vol. Determinants of the capital structure of chinese non. This study attempts to extend our knowledge of capital structure and its determinants in listed uk companies. The determinants of the capital structure of listed on.
The determinants of capital structure in emerging capital. Accordingly, financial managers will principally want to know the relationships between certain firmspecific measures and the debt ratio. We explicitly model the adjustment of companies leverage to a target leverage, and this target leverage is itself explained by a set of. The determinants of firms leverage followed modified pecking order.
This paper uses a dynamic unrestricted capital structure model to examine the determinants of the private companies target financial leverage and the. Thirdly, a comparison of past and current evidence in terms of dutch institutional settings is presented. In their study of capital structure in the g7 economies, rajan and zingales 1995 find gearing in the uk to be positively related to tangibility the. Request pdf firm, country and macroeconomic determinants of capital structure. The findings reflect the transitional nature of the chinese corporate environment. First, china is the second largest economies in the world and the largest emerging economy with increasingly influential role in the worlds economic system. The macrofinancial environment in which the cee countries capital markets function is typical for countries moving from centrally planned to marketoriented economies. The determinants of capital structure of jordanian mining and extraction industries. Introduction study of the capital structure and the effects of financial leverage in the socalled transition economies is still a matter of current interest. The determinants like collateral value of assets, size, risk, growth opportunities, profitability and non debt tax shield were studied. Determinants of the capital structure of tsl sector.
Capital structure, leverage, transition economies, emerging market, liquidity. The findings indicate the emerging character of serbian corporate environment. In section 2 the potential determinants of capital structure are summarized and theoretical and empirical evidence concerning these determinants is provided. Pdf determinants of capital structure of chineselisted. Determinants of capital structure theoretical aspects corporate finance literature has focused on two broad categories of explanation for capital structure viz. The roles of firm and countryspecific determinants journal of banking and finance, vol. Determinants of capital structure semantic scholar.
The determinants of capital structure in emerging capital markets. However, this economic miracle has been achieved without a modern financial system in place. Once the available and relevant financial sources for a uruguayan firm are defined, their determinants are analyzed. Determinants of organizational structure free download as powerpoint presentation. Within this theory it is suggested that firms make use of internal finance first and if it is determinants of capital structure order theory. Evidence from the banking sector of pakistan sidra amjad, sumaira tufail and bilal hailey college of commerce university of the punjab lahore, pakistan. The second capital structure theory which was developed to explain the behavior of firms which static trade off theory failed to explain is the pecking order theory. The analysis of the capital structure in the posttransition economies of the balkan countries with the exception of slovenia, has been overlooked by the extant. Smes in total constitute a large proportion of the economic activity and considered to be an engine of. Request pdf the determinants of capital structure in transitional economies this study investigates whether capital structure determinants in emerging central and eastern european cee.
Determinants of economies of scale in large businesses a. Furthermore identifying the determinants of capital structure also can help investors and managers of firm as it will provide better understanding of the firm capital structures strategy by considering companies characteristics in order. The vast majority of previous empirical works analyses the capital structure of firms in economies with highly developed stock markets. Songb afaculty of management and administration, macao university of science and technology, avenida wai long, taipa, macao, peoples republic of china bschool of economics and finance and center for china financial research, the university of hong kong, hong kong, peoples republic of china. Introduction capital structure refers to the different options used by a firm in financing its assets bhaduri, 2002. The analysis of the capital structure in the posttransition economies of the balkan countries with the exception of slovenia, has been. Capital structure a reading prepared by pamela peterson drake outline 1. The paper explores a vast body of literature in articulating critical issues in capital structure decision. Many muslim individual and institutional investors seek to invest only in stocks that are compliant with the shariah i. Many studies including pandey 2001 have identified various determinants of capital structure, which generally include tangibility of assets, size, growth, profitability, and age of firms. Consequently, we know little about the applicability of various capital structure theories to firms that are private, small, andor outside the manufacturing industry in these economies.
We aims to contribute to the empirical capital structure literature in the. Determinants of organizational structure organizational. Pdf this study examines the factors which affect the capital structure of 608 nonfinancial firms in vietnam during the period 20092017. This paper was aimed at finding and analyzing the factors that are most important in determining the capital structure of commercial banks in the bric region. Capital structure determinants in transitional economies 71 structure of the selected large listed companies in serbia, croatia, and the republic of n orth macedonia, from 2012. Most of the empirical studies about capital structure tend to focus either on overall developed markets or on emerging countries. This paper uses a dynamic unrestricted capital structure model to examine the determinants of the private companies target financial leverage and the speed of adjustment to it in two transition economies, the czech republic and bulgaria.
Huang and tao 2010 found that economic structure in china su ers from serious distortions in labor, capital, land, energy, and the environment. The purpose of this paper is to determine whether capital structure determinants in transitional cee countries support traditional capital structure. We model the leverage ratio as a function of firmspecific characteristics. The entrance of these emerging economies into the world marketplace brings increased relevance to knowing whether present capital structure theories work in this unique transitional environment. Firm, country and macroeconomic determinants of capital structure.
Capital structure theories 1 net income approach ni suggested by durand it says a change in the capital structure will lead to a corresponding change in the overall cost of capital as well as the total value of the firm if the ratio of debt to equity is increased, the weighted average cost of capital will decline, while the value of the firm. An empirical study of companies from selected post transition economies june 2016 zbornik radova ekonomskog fakulteta u rijeci proceedings of rijeka school of. An empirical study of companies from selected post transition economies zbornik radova ekonomskog fakulteta u rijeci, casopis za ekonomsku teoriju i praksu proceedings of rijeka faculty of economics, journal of economics and business, vol. The dynamics of capital structure in transition economies, macroeconomics 0303005, university library of munich, germany. The determinants of capital structure in transitional economies. In section 1 the most prominent theoretical and empirical findings are surveyed. Determinants of capital structure evidence from shariah. This paper explores the determinants of the capital structure of serbian firms listed on the regulated market using panel data. G15, g30, g32 introduction capital structure is defined as a combination of equity and debt that a firm uses to finance its assets. Determinants of capital structure of chineselisted companies. Evidence from an economy without stock market ignacio munyo.
Determinants of capital structure have received much attention among the researchers. Smes, malaysia introduction smes are important to almost all economies in the world, but especially to those in developing countries. Figures 14 about here this paper examines the political economic determinants of land allocation between industry and services in china. A summarized correlation of each determinant by countries is presented in. Evidence from transition economies this study explores the significance of firmspecific, institutional, and. One key factor that distinguishes sc firms from their non compliant peers snc is that the former is not. Abstract this paper analyzes the determinants of the sources of funding for the firms of an economy without stock market. Acta universitatis agriculturae et silviculturae mendelianae brunensis, 20, lxi, no.
Sorry, we are unable to provide the full text but you may find it at the following locations. Such issues have stimulated new studies about capital structure in small transitional economies such as vietnam. Pdf capital structure determinants in transitional economies. Firm, industry and country level determinants of capital structure. Firm, country and macroeconomic determinants of capital. This paper aims to analyze the determinants of the capital structure of the companies in the western balkans wbs using a panel of 30 nonfinancial firms listed in zagreb stock exchange, belgrade stock exchange, and. Capital structure determinants in transitional economies. In this study, we attempted to analyze the determinants of capital structure for indian firms using a panel framework and to investigate whether the capital structure models derived from western settings provide convincing explanations for capital structure decisions of the indian firms.